Things to Avoid While Purchasing a New Home

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their enthusiasm straight to the mall or appliance store. It's best to remember that until you get the keys, your lender is watching your finances very closely. Below you'll find a list of actions to avoid during this crucial time of your home purchase.

Don't make expensive purchases. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new castle, but stay away from big purchases like furniture, cars, appliances, or vacations until closing. Your credit numbers could change suddenly if you make a huge purchase using credit cards. Using cash to purchase big-ticket items can even be a mistake: many lending institutions consider your available cash when approving your mortgage loan.

Don't look for a new job. Stability in your job history is a positive thing to lenders. Changing jobs may not affect your ability to qualify for a mortgage loan - especially if you are improving your salary. But for some, changing careers during the mortgage approval process may bring concern and affect your application.

Don't change banks or move finances around in your bank accounts. Bank statements from the last two or three months for all of your accounts (checking, savings, money market, and others) will likely be analyzed as the lending institution considers your approval. Your lender hopes to see a consistent rise and fall of your money each month, in order to rule out fraud. Even for innocent purposes, moving around funds or switching banks may make it harder for your lender to verify your account history.

Don't give funds directly to your seller (usually in cases of "for sale by owner") to be used as earnest money. As a rule, your good faith money is yours, not the seller's up until the sale is final. The FSBO seller might not know that this earnest money should be used for your expenses at closing. A neutral party, like an attorney can hang onto your earnest money, or you may put it temporarily into a trust account until closing. Should your home purchase fail, your contract with the seller should dictate where the earnest money should go.

Accelerated Lending Source can walk you through the pitfalls of getting a mortgage. Call us at 303-843-9171 x 14.